Ben Horowitz on wage-fixing
I am really, really enjoying Ben Horowitz’s The Hard Thing About Hard Things. It’s blunt and refreshing, and lives up to its title. It’s a nice counter to the notion that running a business is dreamy and life-affirming all the time.
But! I was a bit surprised to find him advocate the sort of behavior that has ensnared a bunch of tech firms in a wage-fixing suit. A good rule of thumb is my Reflexive Principle of Employee Raiding, which states, “If you would be shocked and horrified if Company X hired several of your employees, then you should not hire any of theirs.” […]In order to avoid these sticky situations, many companies employ written or unwritten policies that name companies where it is not okay to hire without CEO (or senior executive) approval. With such a policy in place, you will be able to give your friend one last chance to save their employee or to object prior to you hiring them. (pp. 116–117)
On its surface, it seems like relationship advice: don’t take your friends’ or business partners’ employees.
But this is precisely what collusion is. Eric Schmidt and Steve Jobs didn’t aim to “collude”; they just intended to protect their relationships (and their interests). That they failed to notice that they were interfering in a market for employee talent is the problem.